US State Dept report on money laundering and financial crimes

United States Department of State
Bureau for International Narcotics and Law
Enforcement Affairs
International
Narcotics Control
Strategy Report
Volume II
Money Laundering and Financial Crimes
March 2017

INCSR 2017 Volume II Money Laundering and Financial Crimes
Contents
Money Laundering and Financial Crimes ...............................................5
Introduction...............................................................................................6
Legislative Basis and Methodology for the INCSR ................................7
Bilateral Training Activities......................................................................9
Board of Governors of the Federal Reserve System (FRB)...................9
Department of Homeland Security ........................................................10
Immigration and Customs Enforcement (ICE)......................................10
Department of Justice ............................................................................11
Drug Enforcement Administration (DEA)..............................................11
Office of Overseas Prosecutorial Development, Assistance and
Training; the Money Laundering and Asset Recovery Section; and the
National Security Division (OPDAT, MLARS, and NSD).......................12
Department of State................................................................................14
Department of the Treasury ...................................................................15
Internal Revenue Service, Criminal Investigations (IRS-CI) ................15
Office of the Comptroller of the Currency (OCC) .................................16
Office of Technical Assistance (OTA) ...................................................17
Comparative Table Key ..........................................................................19
Comparative Table..................................................................................21
Countries/Jurisdictions of Primary Concern........................................26
Afghanistan.............................................................................................27
Albania.....................................................................................................28
Algeria .....................................................................................................30
Antigua and Barbuda..............................................................................32
Argentina.................................................................................................34
Aruba .......................................................................................................36
Azerbaijan ...............................................................................................38
Bahamas..................................................................................................40
Barbados.................................................................................................42
Belize .......................................................................................................43
Benin........................................................................................................45
Bolivia......................................................................................................47
Bosnia and Herzegovina ........................................................................49

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Brazil........................................................................................................51
British Virgin Islands..............................................................................53
Burma ......................................................................................................55
Cabo Verde..............................................................................................57
Cambodia ................................................................................................59
Canada.....................................................................................................61
Cayman Islands ......................................................................................63
China, People’s Republic of...................................................................65
Colombia .................................................................................................67
Costa Rica...............................................................................................69
Cuba ........................................................................................................71
Curacao ...................................................................................................73
Dominica .................................................................................................75
Dominican Republic ...............................................................................77
Ecuador ...................................................................................................79
Egypt........................................................................................................81
El Salvador ..............................................................................................83
Georgia....................................................................................................85
Ghana ......................................................................................................87
Grenada...................................................................................................89
Guatemala ...............................................................................................90
Guinea-Bissau.........................................................................................92
Guyana ....................................................................................................94
Haiti..........................................................................................................96
Honduras.................................................................................................98
Hong Kong ............................................................................................100
India .......................................................................................................102
Indonesia...............................................................................................104
Iran.........................................................................................................106
Iraq.........................................................................................................108
Italy ........................................................................................................110
Jamaica .................................................................................................112
Kazakhstan............................................................................................114
Kenya.....................................................................................................115

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Korea, Democratic People’s Republic of ............................................118
Kyrgyz Republic....................................................................................119
Laos .......................................................................................................121
Lebanon.................................................................................................123
Liberia....................................................................................................125
Malaysia.................................................................................................127
Mexico ...................................................................................................129
Morocco.................................................................................................131
Netherlands...........................................................................................133
Nicaragua ..............................................................................................134
Nigeria ...................................................................................................136
Pakistan.................................................................................................138
Panama..................................................................................................140
Paraguay ...............................................................................................142
Peru .......................................................................................................144
Philippines ............................................................................................145
Portugal.................................................................................................148
Russian Federation...............................................................................149
Senegal..................................................................................................151
Serbia.....................................................................................................153
Sint Maarten ..........................................................................................155
South Africa ..........................................................................................156
Spain......................................................................................................159
St. Kitts and Nevis ................................................................................160
St. Lucia.................................................................................................162
St. Vincent and the Grenadines ...........................................................164
Suriname ...............................................................................................166
Tajikistan...............................................................................................168
Tanzania ................................................................................................170
Thailand.................................................................................................171
Timor-Leste ...........................................................................................173
Trinidad and Tobago ............................................................................175
Turkey....................................................................................................176
Turkmenistan ........................................................................................178

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Ukraine ..................................................................................................180
United Arab Emirates ...........................................................................182
United Kingdom....................................................................................184
Uruguay.................................................................................................186
Uzbekistan.............................................................................................188
Venezuela..............................................................................................190
Vietnam..................................................................................................192
Appendices ...........................................................................................195
Common Abbreviations .......................................................................196
Definitions.............................................................................................199

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Money Laundering and Financial Crimes

INCSR 2017 Volume II Country Reports
6
Introduction
The 2017 International Narcotics Control Strategy Report, Money Laundering and Financial
Crimes, highlights the most significant steps countries and jurisdictions categorized as “Major
Money Laundering Countries” have taken to improve their anti-money laundering (AML)
regimes. The legislatively mandated annual report provides a snapshot of the AML legal
infrastructure of each country or jurisdiction and its capacity to share information and cooperate
in international investigations. The narrative for each jurisdiction also provides a link to the
most recent mutual evaluation performed by or on behalf of the Financial Action Task Force
(FATF) or the FATF-style regional body to which the country or jurisdiction belongs, which will
allow those interested readers to find additional detailed information on the country’s AML
capacity and the effectiveness of its programs.
In addition, the report details United States government efforts to provide technical assistance
and training. In 2016, U.S. government personnel drew upon their expertise to build capacity
with counterpart countries across the globe, sharing their experience and knowledge to enhance
global rule of law and U.S. security interests. Working independently and with other donor
countries and organizations, U.S. experts and partners provided training programs, mentoring,
and support for supervisory, law enforcement, prosecutorial, customs, and financial intelligence
unit personnel as well as private sector entities. These efforts are building capacity in
jurisdictions that are lacking, strengthening compliance with international standards, and
contributing to an increase in investigations, prosecutions, and convictions.
As in past years, money laundering continues to be a serious global threat. As transnational
criminal organizations, terrorist groups, and other bad actors increasingly draw upon new
technologies and criminal techniques to fund their illegal activities and generate and launder
their considerable proceeds, the challenges faced by the financial, law enforcement, supervisory,
legal, and intelligence communities are exacerbated. Jurisdictions flooded with illicit funds
remain vulnerable to the breakdown of the rule of law, the corruption of public officials, and
destabilization of their economies.
As political stability, democracy, and free markets depend on solvent, stable, and honest
financial, commercial, and trade systems, the continued development of effective AML regimes
consistent with international standards is vital. The Department of State’s Bureau of
International Narcotics and Law Enforcement Affairs looks forward to continuing to work with
our U.S. and international partners in furthering this important agenda, promoting compliance
with international norms and strengthening capacities globally to combat money laundering.

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Legislative Basis and Methodology for the INCSR
The Money Laundering and Financial Crimes volume of the Department of State’s International
Narcotics Control Strategy Report (INCSR) has been prepared in accordance with section 489 of
the Foreign Assistance Act of 1961, as amended (the “FAA,” 22 U.S.C. § 2291) .1
The FAA requires a report on the extent to which each country or entity that received assistance
under chapter 8 of Part I of the Foreign Assistance Act in the past two fiscal years has “met the
goals and objectives of the United Nations Convention Against Illicit Traffic in Narcotic Drugs
and Psychotropic Substances” (“1988 UN Drug Convention”) (FAA § 489(a)(1)(A)).
Although the 1988 UN Drug Convention does not contain a list of goals and objectives, it does
set forth a number of obligations the parties agree to undertake. Generally speaking, it requires
the parties to take legal measures to outlaw and punish all forms of illicit drug production,
trafficking, and drug money laundering; to control chemicals that can be used to process illicit
drugs; and to cooperate in international efforts to these ends. The statute lists action by foreign
countries on the following issues as relevant to evaluating performance under the 1988 UN Drug
Convention: illicit cultivation, production, distribution, sale, transport and financing, money
laundering, asset seizure, extradition, mutual legal assistance, law enforcement and transit
cooperation, precursor chemical control, and demand reduction.
In addition to identifying countries as major sources of precursor chemicals used in the
production of illicit narcotics, the INCSR is mandated to identify “major money laundering
countries” (FAA §489(a)(3)(C)). The INCSR also is required to report findings on each
country’s adoption of laws and regulations to prevent narcotics-related money laundering (FAA
§489(a)(7)(C)). This report is the section of the INCSR that reports on country efforts related to
money laundering and financial crimes.
A major money laundering country is defined by statute as one “whose financial institutions
engage in currency transactions involving significant amounts of proceeds from international
narcotics trafficking” (FAA § 481(e)(7)). Given that money laundering activity has moved
beyond traditional financial institutions to other non-financial businesses and professions and
alternative money value transfer systems, the report includes all countries and other jurisdictions
whose financial institutions and/or non-financial businesses and professions or other value
transfer systems engage in transactions involving significant amounts of drug-related proceeds.
In making that determination, the Department has used the best information it has available,
including by relying upon a country/jurisdiction’s inclusion in INCSR Vol. 1. The following
countries/jurisdictions have been identified this year:
1
The 2017 report on Money Laundering and Financial Crimes is a legislatively mandated section of the U.S. Department of State’s annual International Narcotics Control Strategy Report. This
2017 report on Money Laundering and Financial Crimes is based upon the contributions of numerous U.S. Government agencies and international sources. Specifically, the U.S. Treasury
Department’s Office of Terrorist Financing and Financial Crimes, which has unique strategic and tactical perspective on international anti-money laundering developments. Many other agencies
also provided information on international training as well as technical and other assistance, including the following: Department of Homeland Security’s Homeland Security Investigations and
Customs and Border Protection; Department of Justice’s Money Laundering and Asset Recovery Section, Criminal Division, National Security Division, Office of International Affairs, Drug
Enforcement Administration, Federal Bureau of Investigation, and Office for Overseas Prosecutorial Development, Assistance, and Training; and, Treasury’s Financial Crimes Enforcement
Network, Internal Revenue Service, Office of the Comptroller of the Currency, and Office of Technical Assistance. Also providing information on training and technical assistance is the
independent Board of Governors of the Federal Reserve System.

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Major Money Laundering Countries in 2016:
Afghanistan, Albania, Algeria, Antigua and Barbuda, Argentina, Aruba, Azerbaijan,
Bahamas, Barbados, Belize, Benin, Bolivia, Bosnia and Herzegovina, Brazil, British Virgin
Islands, Burma, Cabo Verde, Cambodia, Canada, Cayman Islands, China, Colombia,
Costa Rica, Cuba, Curacao, Dominica, Dominican Republic, Ecuador, Egypt, El Salvador,
Georgia, Ghana, Grenada, Guatemala, Guinea-Bissau, Guyana, Haiti, Honduras, Hong
Kong, India, Indonesia, Iran, Iraq, Italy, Jamaica, Kazakhstan, Kenya, Kyrgyz Republic,
Laos, Lebanon, Liberia, Malaysia, Mexico, Morocco, Netherlands, Nicaragua, Nigeria,
North Korea, Pakistan, Panama, Paraguay, Peru, Philippines, Portugal, Russia, Senegal,
Serbia, Sint Maarten, South Africa, Spain, St. Kitts and Nevis, St. Lucia, St. Vincent and
the Grenadines, Suriname, Tajikistan, Tanzania, Thailand, Timor-Leste, Trinidad and
Tobago, Turkey, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom,
Uruguay, Uzbekistan, Venezuela, and Vietnam.

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Bilateral Training Activities
Board of Governors of the Federal Reserve System
(FRB)
Internationally, during 2016, the FRB conducted training and provided technical assistance to
banking supervisors on AML topics during two seminars: one in Mexico City, Mexico and one
in Atlanta, Georgia. Countries participating in these FRB initiatives were Aruba, Bahamas,
Bolivia, Chile, Costa Rica, Czech Republic, Dominican Republic, El Salvador, Guatemala, Haiti,
Honduras, Hong Kong, India, Jamaica, Kosovo, Mexico, Mongolia, Nicaragua, Panama, South
Africa, Suriname, Trinidad and Tobago, Turkey, Turks & Caicos Islands, and Venezuela.

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Department of Homeland Security
Immigration and Customs Enforcement (ICE)
In 2016, ICE provided financial investigations training to over 300 foreign law enforcement
officers; regulatory, intelligence, and administrative personnel; and judicial authorities from
more than eight nations. Employing broad experience and expertise in conducting international
financial investigations, ICE designed the training to provide the attendees with the critical skills
necessary to successfully identify and investigate financial crimes.
Cross-Border Financial Investigations Training Program (CBFIT)
ICE’s CBFIT program provides specialized training, technical assistance, and best practices
related to cross-border financial investigations to foreign law enforcement personnel, judicial
authorities, and intelligence and administrative agencies.
The U.S. DOS provided ICE with funds to manage and implement the CBFIT program and to
enhance the ability of foreign law enforcement personnel to deter terrorists and terrorist groups.
CBFIT further provides foreign partners with the capability to implement international standards.
During Fiscal Year (FY) 2016, the ICE Special Operations Unit conducted CBFIT training
events for Egypt, India, Jordan, Morocco, Oman, Panama, Paraguay, and the Philippines.
Cross-Border Financial Investigations Advisor (CBFIA)
ICE Special Agents are deployed for extended periods of time to foreign posts to serve as
resident CBFIAs. The advisors work in support of the ICE Attaché with appropriate host nation
agencies (customs/border authorities, investigators, prosecutors, financial investigations units,
etc.) to organize and conduct financial investigations training seminars at locations within each
host nation. During FY 2016, ICE deployed three subject matter experts to serve as advisors
under the CBFIA program in Panama, Paraguay, and the Philippines.
Trade Transparency Units (TTU)
The TTU, housed within the ICE National Targeting Center, continues to provide critical
exchange of trade data with numerous countries. The TTU established information sharing
agreements with 14 countries to facilitate the identification of transnational criminal
organizations utilizing TBML schemes to repatriate proceeds generated from multiple illegal
activities, including drug and human smuggling, customs fraud, and intellectual property rights
violations, among others. The TTU methodology, which provides U.S. law enforcement and
international partners with subject matter expertise, training, and investigative tools to combat
TBML and third-party money launderers, has been internationally recognized as a best practice
to address TBML.
ICE continues to expand the network of operational TTUs, which now includes Argentina,
Australia, Chile, Colombia, Dominican Republic, Ecuador, France (cost and market impact
review sharing), Guatemala, Mexico, Panama, Paraguay, Peru, Philippines, and Uruguay.

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Department of Justice
Drug Enforcement Administration (DEA)
The DEA’s Office of Global Enforcement/Financial Operations (FO) provides guidance to
DEA’s domestic and foreign offices, as well as international law enforcement agencies, on issues
relating to all aspects of financial investigations. FO works in conjunction with DEA offices,
foreign counterparts, and other agencies to effectively identify the financial infrastructure
supporting drug trafficking organizations and provide its financial expertise to fully dismantle
and disrupt all aspects of these criminal organizations. Additionally, FO facilitates cooperation
between countries, resulting in the identification and prosecution of drug money laundering
organizations as well as the seizure of assets and the denial of revenue. FO regularly briefs and
educates United States diplomats, foreign government officials, and military and law
enforcement counterparts regarding the latest trends in money laundering, narco-terrorism
financing, international banking, offshore corporations, international wire transfers of funds, and
financial investigations.
FO conducts international training for foreign counterparts to share strategic ideas and promote
effective techniques in financial investigations. During 2016, FO conducted Money Laundering
Seminars for Argentinian and Chilean prosecutors and investigators in Buenos Aires, Argentina
and Santiago, Chile respectively. In addition, FO, in conjunction with the Department of State,
participated in a money laundering technical exchange working group with Cuban officials in
Havana, Cuba; traveled to Beijing, China to meet with federal law enforcement counterparts to
discuss financial investigations and OFAC sanctions; participated in a proceeds of crime working
group with law enforcement officials in Wellington, New Zealand and Canberra, Australia; met
with government officials in Singapore and Hong Kong, China regarding money laundering
issues involving the banking industry; participated in a Regional Target Workshop in Mexico
City, Mexico; as well as met with Chinese Ministry of Public Security officials in Beijing, China
and the Public Security Bureau in Guangzhou and Shenzhen, China in support of ongoing
bilateral investigations with the Narcotics Control Bureau.
Federal Bureau of Investigation (FBI)
The FBI, through a number of agreements with the DOS and other agencies, provided training
and/or technical assistance to law enforcement personnel in Africa, Eurasia, Philippines, Greece,
and Turkey during Fiscal Year 2016.
All training and technical assistance programs were designed to enhance host country law
enforcement capacity to investigate and prosecute money laundering and terrorism financing
crimes.
In September 2016, the Hellenic National Police (HNP) received the Advanced Organized
Crime/Anti-Narcotics training program in Athens, Greece. There were 29 HNP attendees. FBI

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specifically designed this curriculum to increase the HNP’s ability to employ best practices in
complex long-term investigations using novel techniques and various equipment and technical
tools. The objectives of the program were to develop the skills and knowledge of the HNP in the
following areas: investigating organized crime enterprises; understanding regional and
international law enforcement cooperation; money laundering; asset tracking; countering terrorist
financial networks; countering proliferation of weapons of mass destruction (WMD); emerging
transatlantic security challenges; intelligence response to terrorist networks, extremism, and
radicalism; implementation techniques; and electronic and physical surveillance in complex
organized crime and anti-narcotics investigations.
In coordination with DOS Bureau for Counterterrorism, the FBI created and provided 28 Turkish
National Police (TNP) with a Financial Crimes Investigation Course to establish a baseline
standard for financial crime investigations. The objectives of the course were to provide the
TNP with awareness of open source information, international standards for financial
investigations and prosecution, and better understanding of the legal process for obtaining
financial information in the United States. The course focused on financial intelligence, working
with prosecutors, money laundering, digital currency, countering proliferation of WMD, and
other applicable areas. Case studies were used to demonstrate the process of successful financial
investigations. The goal was to enhance Turkey’s capacity to counter financial crimes associated
with illicit trafficking, terrorism, transnational criminal organizations, and WMD proliferation.
In 2016, the Department of Defense also facilitated the training of law enforcement personnel
through a number of training initiatives. In September 2016, at the request of United States
Africa Command, the FBI provided a four-day course in Terrorism Financing and Asset
Forfeiture to 30 Togo law enforcement officers in Lome, Togo. FBI provided lectures in
terrorism financing, money laundering statutes and policy and AML preventative measures, asset
forfeiture, financial intelligence, and other applicable focus areas. The course was designed to
provide the participants with a foundational understanding of money laundering and the use of
asset forfeiture in investigations. The major objectives of the training included identifying
terrorism financing methods, how to disrupt and dismantle criminal enterprises supporting
terrorist organizations, how to deter/stop terrorist threats, and developing intelligence through the
financial/forfeiture organization.
Office of Overseas Prosecutorial Development, Assistance
and Training; the Money Laundering and Asset Recovery
Section; and the National Security Division (OPDAT, MLARS,
and NSD)
In 2016, OPDAT provided training and technical assistance to AML counterparts overseas by
drawing upon the expertise within the DOJ, including MLARS, NSD, and U.S. Attorney’s
Offices. MLARS provided additional financial investigations training using DOS funds.
Africa

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In East Africa, OPDAT organized a regional program for prosecutors and FIU analysts from
Djibouti, Ethiopia, Kenya, Tanzania, and Uganda to address shortcomings to successful
prosecutions of money laundering. In the Horn of Africa, OPDAT brought together law
enforcement officials from Ethiopia, Kenya, Tanzania, and Uganda to improve working
relationships and cooperation to investigate and prosecute money laundering cases. OPDAT
conducted a West Africa regional AML workshop for 40 prosecutors, investigative judges, and
investigators from Cote d’Ivoire, Senegal, Nigeria, Ghana, Benin, and Burkina Faso. MLARS
also provided financial investigations training to FIU personnel, investigators, and prosecutors in
Morocco, in cooperation with the OPDAT resident legal advisor, and in Oman.
Asia and the Pacific
OPDAT Philippines conducted six AML programs for approximately 230 Philippines officials.
OPDAT Indonesia conducted three AML programs for approximately 160 Indonesian officials.
OPDAT Bangladesh conducted four financial investigation programs for approximately 67
Bangladesh officials. OPDAT Pakistan conducted two workshops for Pakistani counterparts on
financial investigations and AML.
Near East
OPDAT Algiers, DOJ’s NSD, and the U.S. Treasury’s Office of Terrorist Financing and
Financial Crimes provided technical assistance to Algeria. Based on assistance from OPDAT,
the Kuwait Financial Intelligence Unit successfully referred seven cases to the Public
Prosecutor’s Office, two of which resulted in successful prosecutions. OPDAT’s program in the
United Arab Emirates (UAE) provided guidance to 40 judges, prosecutors, and police on
exercising the forfeiture provisions of UAE’s AML laws.
Western Hemisphere
OPDAT helped Honduras develop an AML regime compliant with international
standards. OPDAT Mexico provided specialized training for members of federal and state AML
units. Since its inception in May 2016, OPDAT Guatemala has worked with the host nation on
building capacity in extraditions, mutual legal assistance, asset forfeiture, and money laundering
matters. These trainings have been offered by OPDAT, MLARS, and Department of
State/Office of the Legal Adviser. In El Salvador, OPDAT provided technical assistance to
money laundering and asset forfeiture units. OPDAT Panama supported AML reforms and
provided mentoring and capacity building to judges, prosecutors, and investigators.

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Department of State
The DOS Bureau of International Narcotics and Law Enforcement Affairs (INL) Office of Anti-
Crime Programs helps strengthen criminal justice systems and the abilities of law enforcement
agencies around the world. Through its international programs, as well as in coordination with
other INL offices, other DOS bureaus, U.S. government agencies, and multilateral organizations,
the INL Office of Anti-Crime Programs addresses a broad cross-section of law enforcement and
criminal justice areas.
Supported by and in coordination with our DOS and other U.S. agency partners, INL and the
Bureau for Counterterrorism work collectively to provide a variety of programs worldwide. This
integrated approach includes assistance with drafting legislation and regulations, developing
FIUs, and training law enforcement, the judiciary, and financial sector regulators. INL also
provided federal agencies funding to conduct multi-agency financial crime training assessments,
develop specialized AML training in specific jurisdictions, and conduct regional training and
technical assistance programs, including assistance to the International Law Enforcement
Academies. INL continues to support programs incorporating intermittent or full-time mentors
at selected overseas locations.
In 2016, INL provided support to the UN Global Programme against Money Laundering
(GPML). In addition to sponsoring AML technical assistance workshops and conducting short-
term training courses, GPML’s mentoring program provides advisors on a long-term basis to
specific countries or regions, including Central and South Africa, Central Asia and the Mekong
Delta. GPML mentors have focused on establishing and providing support and assistance to
regional asset recovery networks in South and West Africa, the Asia Pacific region, and South
America.
INL continues to provide significant financial and substantive support for various AML bodies
around the globe. In addition to sharing mandatory membership dues to the FATF and the APG
with the U.S. Department of the Treasury (Treasury) and DOJ, INL is a financial and/or
participative supporter of the FATF-style regional bodies’ secretariats and training programs.
INL also supports the capacity building efforts by the Organization of American States
Secretariat on Multidimensional Security (OAS SMS) Inter-American Drug Abuse Control
Commission Experts Group to Control Money Laundering through program design, sustained
engagement, and funding. In conjunction with the OAS SMS and DOJ, the INL AML/CFT Unit
worked with Caribbean jurisdictions throughout 2016 to establish an asset recovery inter-agency
network (ARIN) to enhance regional and international cooperation in forfeiting illicit assets. In
November 2016, ARIN-CARIB was established, bringing the Caribbean region into the global
ARIN movement.
INL supports additional bilateral and multilateral efforts, including those focusing on DNFBPs
and remittances. In July 2016, the INL AML/CFT Unit, in conjunction with the DOS Economics
Bureau and the FBI, held a TBML workshop focusing on diamonds and elements of the diamond
trade that can aid law enforcement. The DOS, in conjunction with DHS and Treasury, has
supported the establishment and development of eight TTUs in the Americas.

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Department of the Treasury
Internal Revenue Service, Criminal Investigations (IRS-CI)
For calendar year 2016, the Internal Revenue Service, Criminal Investigation (IRS-CI) continued
to provide training and technical assistance to international law enforcement officers in detecting
tax, money laundering, and terrorist financing crimes, and preventing public corruption. With
funding provided by the U.S. DOS and other sources, IRS-CI delivered training through agency
and multi-agency technical assistance programs.
International Law Enforcement Academy (ILEA) Training
IRS-CI participated in training at the ILEAs located in Bangkok, Thailand; Budapest, Hungary;
Gaborone, Botswana; and San Salvador, El Salvador. Programs included Financial Investigative
Techniques (FIT) training, Financial Investigation for Fraud and Public Corruption, and support
for the Law Enforcement Leadership Development courses.
During 2016, IRS-CI participated in training programs at the ILEAs for participants from
Albania, Argentina, Bahamas, Barbados, Belize, Bosnia and Herzegovina, Bolivia, Botswana,
Bulgaria, Brazil, Chile, Colombia, Costa Rica, Dominica, Dominican Republic, El Salvador,
Ecuador, Grenada, Guatemala, Guyana, Haiti, Honduras, Hungary, Jamaica, Kazakhstan, Kenya,
Kosovo, Kyrgyzstan, Lesotho, Macedonia, Mexico, Moldova, Montenegro, Namibia, Paraguay,
Peru, Romania, Rwanda, Serbia, Seychelles, St. Kitts and Nevis, St. Lucia, St. Vincent and the
Grenadines, Suriname, Tobago, Turkey, Trinidad, Ukraine, and Uruguay.
Financial Investigative Techniques Training (FIT)
In 2016, IRS-CI conducted FIT courses funded by the DOS and DOJ at the ILEAs and
bilaterally. Fifteen courses were conducted for nearly 500 participants in Botswana, Brazil, El
Salvador, Honduras, Hungary, Mexico, Palau, Philippines, and Thailand.
IRS-CI conducted one-week FIT courses, funded by INL, as follows: in Sao Paulo, Brazil for
thirty participants from Brazil; in Curitiba, Brazil for 29 Brazilian participants; and two courses,
attended by 50 participants, in Bogota, Colombia.
An additional 33 participants from Palau attended FIT training in Koror, Palau, funded by the
Joint Interagency Task Force West, Department of Defense.
With funding provided by DOJ-OPDAT, IRS-CI conducted FIT training in Los Cobanos, El
Salvador for 32 participants from El Salvador and Guatemala, and in Mexico City, Mexico for
22 Mexican attendees.

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IRS-CI conducted two, one-week FIT courses in Tegucigalpa, Honduras. Sixty-four participants
from Honduras attended the training, funded by the DOS and DOJ-OPDAT.
IRS-CI also conducted FIT training in Manilla, Philippines. Thirty-four participants attended the
course that was funded by the DOS, Bureau of Counterterrorism (DOS-CT).
Other Training Initiatives
In February 2016, IRS-CI conducted a two-day Financial Crimes (Short Course) in Gaborone,
Botswana. Forty participants from Botswana attended the course that was funded by the DOS
and the Botswana Unified Revenue Service.
Funded by DOS-CT, IRS-CI conducted Fraud and Public Corruption training in Manilla,
Philippines for thirty participants.
Another Fraud and Public Corruption course, funded by INL, was conducted for 44 participants
in Bangkok, Thailand.
Finally, the Korean National Tax Service funded a one-week Fraud and Public Corruption course
in Seoul, Korea for thirty-nine participants.
Office of the Comptroller of the Currency (OCC)
The U.S. Department of Treasury’s OCC charters, regulates and supervises all national banks
and federal savings associations in the U.S. Its goal is to ensure these institutions operate in a
safe and sound manner and comply with all consumer protection and AML laws and
implementing regulations. In 2016, the OCC sponsored several initiatives to provide AML
training to foreign banking supervisors. These initiatives include its annual AML/CFT School,
which is designed specifically for foreign banking supervisors to increase their knowledge of
money laundering and terrorism financing typologies and improve their ability to examine and
enforce compliance with national laws. The 2016 AML/CFT School was attended by foreign
supervisors from Canada, China, Dubai, Hong Kong, India, Jordan, Latvia, Malawi, Netherlands,
Pakistan, Philippines, South Africa, South Korea, and Turkey. In addition, in November 2016,
the OCC taught the AML/CFT school for the Association of Supervisors of Banks of the
Americas in Panama City, Panama. The AML School in Panama was attended by foreign
supervisors from El Salvador, Haiti, Honduras, Nicaragua, Panama, Paraguay, and Uruguay. In
addition to organizing and conducting schools, OCC officials also met individually, both in the
United States and overseas, with representatives from foreign law enforcement authorities,
financial intelligence units, and AML supervisory agencies to discuss the U.S. AML regime, the
agencies’ risk-based approach to AML supervision, examination techniques and procedures, and
enforcement actions.
The OCC continued its industry outreach efforts to the international banking community during
2016 by participating with other federal banking agencies in regulator panels at the Florida
International Bankers Association and the Association of Certified Anti-Money Laundering

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Specialists’ 15th Annual International Anti-Money Laundering and Financial Crimes
Conference. The focus of the regulator panels was keeping pace with global regulatory changes.
In 2016, the OCC also participated in the Correspondent Banking Coordination Group Oversight
Committee, a new committee established by the Financial Stability Board. OCC continued its
participation in a series of FATF working group and plenary meetings as well as the Basel
Committee on Banking Supervision Anti-Money Laundering Expert Group. In addition, OCC
participated in a significant number of international working groups/public-private dialogues in
2016 with participants from Central America, the Caribbean, Mexico, China, the UK, and the
Persian Gulf region. On an ad hoc basis, OCC meets with delegations from various countries to
discuss the U.S. AML regime and its approach to conducting supervisory examinations.
Office of Technical Assistance (OTA)
Each of OTA’s teams – Revenue Policy and Administration, Budget and Financial
Accountability, Government Debt and Infrastructure Finance, Banking and Financial Services,
and Economic Crimes (ECT) – focuses on particular areas to establish strong financial sectors
and sound public financial management in developing and transition countries. OTA follows a
number of guiding principles to complement its holistic approach to technical assistance and
supports self-reliance by equipping countries with the knowledge and skills required to reduce
dependence on international aid and achieve sustainability. OTA is selective and only works
with those governments that are committed to reform – reform that counterparts design and own
– and to applying U.S. assistance effectively. OTA works side-by-side with counterparts through
ongoing mentoring and on-the-job training, which is accomplished through co-location at a
relevant government agency. OTA’s activities are funded by a direct appropriation from the
U.S. Congress as well as transfers from other U.S. agencies, notably the U.S. State Department
and the U.S. Agency for International Development.
The mission of the ECT, in particular, is to provide technical assistance to help foreign
governments develop and implement internationally compliant AML/CFT regimes. In this
context, the ECT also addresses other financial and predicate crimes, including corruption and
organized crime. To ensure successful outcomes, ECT engagements are predicated on express
requests from foreign government counterparts. The ECT responds to such a request with an on-
site assessment, which considers the jurisdiction’s non-compliance with international standards
and the corresponding needs for technical assistance, as well as the willingness by the
counterparts to engage in an active partnership with the ECT to address those deficiencies.
An ECT engagement, tailored to the specific conditions of the jurisdiction, may involve
placement of a resident advisor and/or utilization of intermittent advisors under the coordination
of a team lead. The scope of ECT technical assistance is broad and can include awareness-
raising aimed at a range of AML/CFT stakeholders; improvements to a legal framework, to
include legislation, regulations, and formal guidance; and improvement of the technical
competence of stakeholders. The range of on-the-job and classroom training provided by the
ECT is equally broad and includes, among other topics, supervisory techniques for relevant
regulatory areas; analytic and financial investigative techniques; cross-border currency

18
movement and TBML; asset seizure, forfeiture, and management; and the use of interagency
financial crimes working groups.
In 2016, following these principles and methods, the ECT delivered technical assistance in
Argentina, Belize, Burma, Cabo Verde, Costa Rica, Dominica, El Salvador, Grenada,
Guatemala, Iraq, Jamaica, Liberia, Paraguay, Peru, and Trinidad and Tobago.

19
Comparative Table Key
The comparative table that follows the Glossary of Terms below identifies the broad range of
actions, effective as of December 31, 2016, that jurisdictions have, or have not, taken to combat
drug money laundering. This reference table provides a comparison of elements that include
legislative activity and other identifying characteristics that can have a relationship to a
jurisdiction’s money laundering vulnerability. With the exception of number 3, all items should
be answered “Y” (yes) or “N” (no). For those questions relating to legislative or regulatory
issues, “Y” is meant to indicate that legislation has been enacted to address the captioned
items. It does not imply full compliance with international standards. All answers
indicating deficiencies within the country’s/jurisdiction’s AML regime should be explained in
the report narrative, as should any responses that differ from last year’s answers.
Glossary of Terms
 1. “Criminalized Drug Money Laundering”: The jurisdiction has enacted laws
criminalizing the offense of money laundering related to the drug trade.
 2. “Know-Your-Customer Provisions”: By law or regulation, the government requires
banks and/or other covered entities to adopt and implement Know-Your-
Customer/Customer Due Diligence programs for their customers or clientele.
 3. “Report Suspicious Transactions”: By law or regulation, banks and/or other covered
entities are required to report suspicious or unusual transactions to designated authorities.
On the Comparative Table the letter “Y” signifies mandatory reporting; “V” signifies
reporting is not required but rather is voluntary or optional; “N” signifies no reporting
regime. (STRs)
 4. “Maintain Records over Time”: By law or regulation, banks and/or other covered
entities are required to keep records, especially of large or unusual transactions, for a
specified period of time, e.g., five years.
 5. “Cross-Border Transportation of Currency”: By law or regulation, the jurisdiction has
established a declaration or disclosure system for persons transiting the jurisdiction’s
borders, either inbound or outbound, and carrying currency or monetary instruments
above a specified threshold.
 6. “Financial Intelligence Unit”: The jurisdiction has established an operative central,
national agency responsible for receiving (and, as permitted, requesting), analyzing, and
disseminating to the competent authorities disclosures of financial information in order to
counter drug money laundering. An asterisk (*) reflects those jurisdictions whose FIUs
are not members of the Egmont Group of FIUs.
 7. “International Law Enforcement Cooperation”: No known legal impediments to
international cooperation exist in current law. Jurisdiction cooperates with authorized
investigations involving or initiated by third party jurisdictions, including sharing of
records or other financial data, upon request.
 8. “System for Identifying and Forfeiting Assets”: The jurisdiction has established a
legally authorized system for the tracing, freezing, seizure, and forfeiture of assets
identified as relating to or generated by drug money laundering activities.

20
 9. “Arrangements for Asset Sharing”: By law, regulation, or bilateral agreement, the
jurisdiction permits sharing of seized assets with foreign jurisdictions that assisted in the
conduct of the underlying investigation. No known legal impediments to sharing assets
with other jurisdictions exist in current law.
 10. “Information Exchange Agreements with Non-U.S. Governments”: The
country/jurisdiction has in place treaties, memoranda of understanding, or other
agreements with other governments to share information related to drug-related money
laundering.
 11. “States Party to 1988 UN Drug Convention”: States party to the 1988 United
Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic
Substances, or a territorial entity to which the application of the Convention has been
extended by a party to the Convention.
 12. “States Party to the UN Convention against Transnational Organized Crime”: States
party to the United Nations Convention against Transnational Organized Crime
(UNTOC), or a territorial entity to which the application of the Convention has been
extended by a party to the Convention.
 13. “States Party to the UN Convention against Corruption”: States party to the United
Nations Convention against Corruption (UNCAC), or a territorial entity to which the
application of the Convention has been extended by a party to the Convention.
 14. “Financial Institutions Transact in Proceeds From International Drug Trafficking
That Significantly Affects the U.S.”: The jurisdiction’s financial institutions engage in
currency transactions involving international narcotics trafficking proceeds that include
significant amounts of U.S. currency; currency derived from illegal sales in the U.S.; or
illegal drug sales that otherwise significantly affect the U.S.

21
Comparative Table
“Y” is meant to indicate that legislation has been enacted to address the captioned items. It does not
imply full compliance with international standards. Please see the individual country reports for
information on any deficiencies in the adopted laws/regulations.
2
The Netherlands extended its application of the 1988 UN Drug Convention to Aruba, Curacao, and Sint Maarten and the
UN Convention against Transnational Organized Crime to Aruba.
ActionsbyGovernments
CriminalizedDrugMoneyLaundering
Know-Your-CustomerProvisions
ReportSuspiciousTransactions(YVN)
MaintainRecordsOverTime
Cross-BorderTransportationofCurrency
FinancialIntelligenceUnit(*)
IntlLawEnforcementCooperation
SystemforIdentifying/ForfeitingAssets
ArrangementsforAssetSharing
Informationexchangeagreementswithnon-U.S.govts
StatesPartyto1988UNDrugConvention
StatesPartytoUNTOC
StatesPartytoUNCAC
FinancialInstitutionstransactinproceedsfrom
internationaldrugtraffickingthatsignificantlyaffectsthe
U.S.
Govt/Jurisdiction
Afghanistan Y Y Y Y Y Y Y Y N Y Y Y Y Y
Albania Y Y Y Y Y Y Y Y N Y Y Y Y N
Algeria Y Y Y Y Y Y Y Y N Y Y Y Y N
Antigua and
Barbuda
Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Argentina Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Aruba
2
Y Y Y Y Y Y Y Y Y Y Y Y N N
Azerbaijan Y Y Y Y Y Y Y Y Y Y Y Y Y N
Bahamas Y Y Y Y N Y Y Y Y Y Y Y Y Y
Barbados Y Y Y Y Y Y Y Y Y Y Y Y N Y
Belize Y Y Y Y Y Y Y Y Y Y Y Y Y N
Benin Y Y Y Y Y Y* Y Y N Y Y Y Y N
Bolivia Y Y Y Y Y Y N Y N Y Y Y Y N

22
3
The UK extended its application of the 1988 UN Drug Convention to British Virgin Islands and Cayman Islands. The
UNCAC has been extended to British Virgin Islands. The UNTOC has been extended to British Virgin Islands and Cayman
Islands.
ReportSuspiciousTransactions(YPN)
StatesPartytoUNTOC
StatesPartytoUNCAC
internationaldrugtraffickingthatsignificantly
affectstheU.S.
Govt/Jurisdiction
Bosnia &
Herzegovina
Y Y Y Y Y Y Y Y N Y Y Y Y N
Brazil Y Y Y Y Y Y Y Y Y Y Y Y Y N
British Virgin
Islands
3 Y Y Y Y Y Y Y Y Y Y Y Y Y N
Burma Y Y Y Y Y Y* Y Y N Y Y Y Y N
Cabo Verde Y Y Y Y Y Y* Y Y N Y Y Y Y N
Cambodia Y Y Y Y Y Y Y Y N Y Y Y Y N
Canada Y Y Y Y Y Y Y Y Y Y Y Y Y N
Cayman Islands
3
China Y Y Y Y Y Y* N Y N Y Y Y Y N
Colombia Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Costa Rica Y Y Y Y Y Y Y Y N Y Y Y Y Y
Cuba Y Y Y Y Y Y* Y Y N
N/
A
Y Y Y N
Curacao
2
Y Y Y Y Y Y Y Y Y Y Y N N N
Dominica Y Y Y Y Y Y Y Y N Y Y Y Y N
Dominican
Republic
Y Y Y Y Y Y* Y Y Y Y Y Y Y Y
Ecuador Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Egypt Y Y Y Y Y Y Y Y Y Y Y Y Y N

23
4
The People’s Republic of China extended the 1988 UN Drug Convention, the UNTOC, and the UNCAC to the special
administrative region of Hong Kong.
StatesPartytoUNTOC
StatesPartytoUNCAC
affectstheU.S.
Govt/Jurisdiction
El Salvador Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Georgia Y Y Y Y Y Y Y Y Y Y Y Y Y N
Ghana Y Y Y Y Y Y Y Y Y Y Y Y Y N
Grenada Y Y Y Y Y Y Y Y N Y Y Y Y N
Guatemala Y Y Y Y Y Y Y Y N Y Y Y Y Y
Guinea-Bissau Y Y Y Y N Y* Y Y Y Y Y Y Y N
Guyana Y Y Y Y Y Y* Y Y N Y Y Y Y Y
Haiti Y Y Y Y N Y* Y Y Y Y Y Y Y N
Honduras Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Hong Kong
4
Y Y Y Y N Y Y Y Y Y Y Y Y N
India Y Y Y Y Y Y Y Y N Y Y Y Y N
Indonesia Y Y Y Y Y Y Y Y N Y Y Y Y N
Iran Y Y Y Y Y Y* N N N
N/
A
Y N Y N/A
Iraq Y Y Y Y Y Y* Y Y N Y Y Y Y N
Italy Y Y Y Y Y Y Y Y Y Y Y Y Y N
Jamaica Y Y Y Y Y Y Y Y Y Y Y Y Y N
Kazakhstan Y Y Y Y Y Y Y Y N Y Y Y Y N
Kenya Y Y Y Y Y Y* Y Y Y Y Y Y Y Y
Korea, Dem.
People’s Rep.
Y
N/
A
N/
A
N/
A
N/
A
N/
A
N
N/
A
N/
A
N Y N N N

24
StatesPartytoUNTOC
StatesPartytoUNCAC
affectstheU.S.
Govt/Jurisdiction
Kyrgyz Republic Y Y Y Y Y Y Y N N Y Y Y Y N
Laos Y Y Y N Y Y* Y N N Y Y Y Y N
Lebanon Y Y Y Y Y Y Y Y Y Y Y Y Y N
Liberia Y Y Y Y Y Y* Y Y N Y Y Y Y N
Malaysia Y Y Y Y Y Y Y Y N Y Y Y Y N
Mexico Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Morocco Y Y Y Y Y Y Y Y Y Y Y Y Y N
Netherlands Y Y Y Y Y Y Y Y Y Y Y Y Y N
Nicaragua Y Y Y Y Y Y* Y Y N Y Y Y Y N
Nigeria Y Y Y Y Y Y Y Y N Y Y Y Y Y
Pakistan Y Y Y Y Y Y* Y N N Y Y Y Y Y
Panama Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Paraguay Y Y Y Y Y Y Y Y N Y Y Y Y Y
Peru Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Philippines Y Y Y Y Y Y Y Y N Y Y Y Y Y
Portugal Y Y Y Y Y Y Y Y Y Y Y Y Y N
Russia Y Y Y Y Y Y Y Y Y Y Y Y Y Y
St. Kitts and Nevis Y Y Y Y Y Y Y Y Y Y Y Y Y N
St. Lucia Y Y Y Y Y Y Y Y Y Y Y Y Y N
St. Vincent and
the Grenadines
Senegal Y Y Y Y Y Y Y Y Y Y Y Y Y N

25
* FIU is not a member of the Egmont Group of FIUs
StatesPartytoUNTOC
StatesPartytoUNCAC
affectstheU.S.
Govt/Jurisdiction
Serbia Y Y Y Y Y Y Y Y Y Y Y Y Y N
Sint Maarten
2
South Africa Y Y Y Y Y Y Y Y Y Y Y Y Y N
Spain Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Suriname Y Y Y Y Y Y* Y Y Y Y Y Y N N
Tajikistan Y Y Y Y Y Y Y Y N Y Y Y Y N
Tanzania Y Y Y Y N Y Y Y N Y Y Y Y N
Thailand Y Y Y Y Y Y Y Y Y Y Y Y Y N
Timor-Leste Y Y Y Y Y Y* Y Y N Y Y Y Y N
Trinidad and
Tobago
Y Y Y Y Y Y Y Y Y Y Y Y Y N
Turkey Y Y Y Y Y Y Y Y N Y Y Y Y N
Turkmenistan Y Y Y Y Y Y* Y Y N Y Y Y Y N
Ukraine Y Y Y Y Y Y Y Y N Y Y Y Y N
United Arab
Emirates
Y Y Y Y Y Y Y Y N Y Y Y Y N
United Kingdom Y Y Y Y Y Y Y Y Y Y Y Y Y N
Uruguay Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Uzbekistan Y Y Y Y Y Y Y Y N Y Y Y Y N
Venezuela Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Vietnam Y Y Y Y Y Y* Y Y N Y Y Y Y Y

26
Countries/Jurisdictions of Primary Concern

27
Afghanistan
OVERVIEW
Terrorist and insurgent financing, money laundering, bulk cash smuggling, abuse of informal
value transfer systems, and other illicit activities financing criminal activity continue to threaten
Afghanistan’s security and development. Afghanistan remains the world’s largest opium
producer and exporter. Corruption remains a major obstacle to the nation’s progress. The
National Unity Government (GNU) has enacted laws and regulations to combat financial crimes,
but faces a significant challenge in implementing and enforcing the law.
VULNERABILITIES AND EXPECTED TYPOLOGIES
The narcotics industry, corruption, and fraud are major sources of illicit revenue. Afghanistan
has a small banking sector but large enforcement and regulatory challenges, even though most of
its banks strive to adhere to international standards. Traditional payment systems, particularly
hawala networks, provide a significant range of financial and non-financial business services in
local, regional, and international markets. Some Afghan business consortiums that control both
hawaladars and banks allow criminal elements to manipulate domestic and international financial
networks to administer and launder illicit funds.
KEY AML LAWS AND REGULATIONS
In 2014, Afghanistan enacted a comprehensive AML law, which was amended in March 2015
via presidential decree. Significant provisions include an adequate legal basis to criminalize
money laundering; KYC and STR provisions; establishment of an operationally independent
FIU; and the authority to confiscate funds or property derived from criminal activity, to dispose
of such property, and to hold the proceeds of criminal profits in an asset recovery/sharing fund.
In June 2015, Afghanistan issued Fit and Proper Regulations to ensure financial institutions are
well managed and persons who own or control them are competent and meet certain criteria. In
May 2015, Afghanistan issued Cash Courier Regulations establishing a cross-border currency
reporting requirement. Amendments to that regulation that came into force in March 2016
ensure that seizure or restraint of funds is authorized where there is a suspicion of money
laundering.
Although Afghanistan’s Law on Extradition of the Accused, Convicted Individuals, and Legal
Cooperation allows for extradition based upon multilateral arrangements such as the 1988 UN
Drug Convention, Article 28 of the Afghan Constitution requires reciprocal agreements between
Afghanistan and the requesting country. The United States does not have an extradition treaty
with Afghanistan and cannot reciprocate under the multilateral treaties.
Afghanistan is a member of the APG, a FATF-style regional body. Its most recent mutual
evaluation can be found at: http://www.apgml.org/members-and-observers/members/member-
documents.aspx?m=69810087-f8c2-47b2-b027-63ad5f6470c1
AML DEFICIENCIES

28
Afghanistan should ensure market manipulation and counterfeiting are predicates for money
laundering. It should increase supervision of financial institutions and DNFBPs to ensure their
compliance with AML regulations. Afghanistan should also increase the number of
MSB/hawala inspections, enact a comprehensive registration regime, and expand
implementation of the MSB/hawala licensing program. Afghanistan should create an outreach
program to notify and educate hawaladars about licensing, transaction reporting requirements,
and STRs. Regulators and enforcement officers need adequate resources to supervise the
financial sector and investigate financial crimes.
ENFORCEMENT/IMPLEMENTATION ISSUES AND COMMENTS
Afghanistan’s law enforcement and institution regulation are hampered by corruption. Limited
resources, lack of technical expertise, and poor infrastructure also deter effective regulatory
oversight. No clear division exists between the hawala system and the formal financial sector.
Hawaladars use bank accounts and wire transfer services to settle with other hawaladars abroad
and within Afghanistan. Hawaladars generally fail to file STRs as legally required. Insurance
companies and securities dealers are also required to file STRs, but the government does not
enforce this requirement. Precious metals and stones dealers, lawyers, accountants, and real
estate agents are not supervised as financial businesses in Afghanistan.
Afghanistan’s FIU, the Financial Transactions and Reports Analysis Center of Afghanistan
(FinTRACA), has limited capacity to identify bad actors and build cases against them.
FinTRACA often faces administrative hurdles within the Attorney General’s Office (AGO)
regarding prosecution. The AGO is authorized to prosecute money laundering and seize illicit
assets, but its new management team, seated in the second half of 2016, has yet to effectively
grapple with weak prosecutorial capacity to pursue money laundering cases and asset seizures.
Furthermore, the Afghan government has yet to establish a recovery mechanism for the value of
assets seized, and therefore no entity, including the police and courts, has responsibility for post-
conviction asset recovery. Early positive indications show that FinTRACA’s new leadership is
dynamic and anxious to pursue the organization’s objectives.
Kabul International Airport lacks effective currency controls for all passengers. Beyond the
formal border crossings, the Afghanistan-Pakistan frontier is notoriously porous, enabling
smugglers to cross with relative ease.
Law enforcement officers, prosecutors, and judges need training on effective, lawful asset
seizure, and the GNU should implement procedures for money laundering seizures. It should
continue to increase seizure and confiscation procedures in cases involving narcotics and drug
trafficking. Afghanistan also should strengthen inspection controls and enforcement of the
currency declaration regime at airports.
Albania
OVERVIEW

29
Albania is not a regional financial or offshore center. The country remains at significant risk for
money laundering due to rampant corruption and weak legal and government institutions.
Albania has a large cash economy and informal sector, with significant money inflows from
abroad in the form of remittances. Major proceeds-generating crimes in Albania include drug
trafficking, tax evasion, smuggling, and human trafficking. Albania has a substantial black
market for smuggled goods, and smuggling is facilitated by weak border controls and customs
enforcement. Albania produces and exports significant amounts of marijuana, primarily for
European use, and is a transit country for Afghan heroin and cocaine, serving as a key gateway
for heroin distribution throughout Europe. Albania serves as a base of operations for regional
organized crime organizations. Illicit proceeds are easily laundered.
Real estate (particularly in the coastal areas), business development projects, and gaming are
among the most popular methods of hiding illicit proceeds. Law enforcement recognizes the
need to combat money laundering but remains largely ineffective in doing so. The Albanian
State Police has a dedicated Economic Crime Unit tasked with AML efforts, while police and
prosecutors continue to receive training on this subject. Better collaboration between police and
prosecutors is needed.
In 2016, the Albanian parliament passed several significant constitutional and legal reforms
aimed at tackling corruption and organized crime. The reforms, if implemented properly, will
result in better enforcement of money laundering and other financial crime laws.
In recent years, Albania has made technical improvements to its AML regime. These include
increasing predicate crimes covered by the AML law, establishing CDD measures for financial
institutions, and improving the powers and processes used by authorities in responding to foreign
requests for assistance.
Albania and the United States do not have a MLAT, but cooperation is possible through
multilateral conventions.
Albania is a member of MONEYVAL, a FATF-style regional body. Its most recent mutual
evaluation can be found at:
http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Albania_en.asp
AML DEFICIENCIES
Albania has a substantial black market for smuggled goods, primarily tobacco, jewelry, stolen
cars, and mobile phones. Smuggling is facilitated by weak border controls and customs
enforcement.

30
The Albanian court system applies a high burden of proof in money laundering cases. Some, but
not all, courts require a simultaneous conviction for a predicate offense before issuing a
conviction for money laundering, even though the law specifically states that no predicate
offense is necessary. The Supreme Court has not issued a controlling decision, so the law in this
area remains in flux. The AML regime also is plagued by numerous technical deficiencies.
While the Government of Albania passed criminal code reforms and legislative amendments in
2012, implementation efforts have been weak. Despite a sizeable number of money laundering
investigations, the number of money laundering prosecutions remains low. Through mid-year
2016, four money laundering cases were referred to the court for prosecution while seven
defendants were convicted of the offense. In 2016 the Prosecutor General’s Office hired a third
forensic accountant to assist in the investigation of cases.
The government has taken steps to combat official corruption, but it needs to continue to address
judicial and prosecutorial corruption. Since the lifting of immunity for judges and high officials
in 2012, prosecutors have investigated at least 23 high-level officials, including 14 locally-
elected officials, four judges, one court clerk, three prosecutors, and one police officer.
Jurisdiction over judicial corruption and high-level corruption was transferred to the Serious
Crimes Court in March 2014. Prosecutions led by the related Serious Crimes Prosecution Office
have resulted in the convictions of two judges, one prosecutor, and one locally elected mayor on
corruption charges. Two other judges and one prosecutor charged with corruption await trial.
On July 22, 2016, Albania passed substantial amendments to its Constitution to reform the
justice system, including vetting judges and prosecutors for corruption and links to organized
crime, and creating an independent, vetted, and monitored court and prosecutorial office for
cases of high-level corruption and organized crime, which would include organized narcotics
traffickers. Several laws necessary for the implementation of the constitutional changes were
passed in October 2016. Albania must implement the laws effectively and continue to develop
the effectiveness of its police and prosecutors that focus on corruption, money laundering, and
economic crimes.
Algeria
OVERVIEW
Money laundering through Algeria’s formal financial system is minimal due to stringent
exchange control regulations and a banking sector dominated by state-owned
banks. Additionally, the continued prevalence of archaic paper-based systems and banking
officials not trained to function in the current sophisticated international financial system has
deterred money launderers who are more likely to use sophisticated transactions. A large
informal, cash-based economy, estimated to be 30-50 percent of GDP, is vulnerable to abuse by
criminals. Notable criminal activity includes trafficking, particularly of drugs, cigarettes, arms,

31
and stolen vehicles; theft; extortion; and embezzlement. Public corruption and terrorism remain
serious concerns.
Algeria is making significant progress in bringing its AML regime into line with international
standards.
The restricted convertibility of the Algerian dinar enables the central bank to monitor all
international financial operations carried out by banking institutions. Most money laundering
occurs primarily outside the formal financial system, through tax evasion, abuse of real estate
transactions, and commercial invoice fraud. Algerian authorities are increasingly concerned by
cases of customs fraud and TBML. Financial crime risks are increasing due to the widespread
use of cash in Algeria’s economy.
The following laws are applicable to money laundering in Algeria: Executive Decree no. 06-05
fixing the shape, design, content, and the acknowledgment of receipt of the declaration of
suspicion; Regulation no. 12-03 on the prevention and fight against money laundering and
terrorist financing; Executive Decree no. 13-157 amending and supplementing Executive Decree
02-127 on the creation, organization, and functioning of the Financial Intelligence Processing
Unit (CTRF), Algeria’s FIU; Law no. 15-06 amending and supplementing Law No. 05-01 on the
prevention and fight against money laundering and terrorist financing; Executive decree no. 15-
153 fixing the threshold for payments that must be made through the banking and financial
circuits; Law no. 16-02 establishing rules for the application of the penal code, Law no. 66-156,
as pertains to AML/CFT.
AML provisions in Algeria impose data collection and due diligence requirements on financial
institutions processing wire transfers, with stricter requirements for cooperation with law
enforcement authorities, upon request, for transfers exceeding $1,000. In addition, all payments
for certain purchases in excess of the following amounts must be completed via the banking
system: DZD 5 million (approximately $45,500) for real estate; or DZD 1 million
(approximately $9,100) for goods and services. Non-compliance with these provisions could
result in sanctions against the individual and/or financial institution.
Algeria is a member of the MENAFATF, a FATF-style regional body. Its most recent mutual
http://www.menafatf.org/images/UploadFiles/Mutual_Evaluation_Report_of_the_Republic_of_
Algeria.pdf
AML DEFICIENCIES
Alternative remittance and currency exchange systems are not regulated.

32
Challenges in implementation of the AML law remain. The CTRF’s self-analysis identifies the
need to educate bankers to increase the accuracy of reporting. While the CTRF has provided
some information on the number of cases it is processing, additional information would be
needed to further evaluate implementation. Furthermore, CTRF should work to increase its
strategic analysis capabilities.
The CTRF is active in its processing and analysis of STRs, increasing its activity based on
additional filings by banks. It is compiling and disseminating AML-related information to banks
and engaging in some level of quantitative and qualitative self-analysis. A CTRF report in
summer 2016 explains that after receiving STRs, the CTRF analyzes the data submitted and
shares with other government entities. The report indicates the CTRF forwarded approximately
125 cases to judicial authorities but did not track results. This increased activity by the CTRF
indicates Algeria is making an effort to improve its AML regime. Algeria should continue to
work to fully implement its laws and regulations.
Antigua and Barbuda
OVERVIEW
Antigua and Barbuda is an offshore center which continues to be vulnerable to money laundering
and other financial crimes. Its relatively large financial sector and internet gaming industry add
to its susceptibility. Antigua and Barbuda also operates a Citizenship by Investment Program
(CIP) that increases its susceptibility to money laundering and other financial crimes. Antigua
and Barbuda is a transit point for illegal drugs going to the United States and Europe. According
to the Antiguan Office of National Drug Control and Money Laundering Policy (ONDCP), the
collaborative efforts between Antigua and Barbuda and U.S. law enforcement agencies have
brought about a decrease in drug trafficking activity.
Money laundering, narcotics trafficking, gaming, and firearms trafficking are major sources of
illicit funds in the country. Funds are laundered through the purchase of real estate, vehicles,
vessels, and jewelry as well as through a variety of businesses.
The CIP remains among the most lax in the world. An individual is eligible for economic
citizenship with a $400,000 minimum investment in real estate, a contribution to the National
Development Fund of $200,000, or a $1.5 million approved business investment. Applicants
must make a source of funds declaration and provide evidence supporting the declaration. The
government established a Citizenship by Investment Unit (CIU) to manage the screening and
application process. The CIU does not maintain adequate autonomy from politicians to prevent
political interference in its decisions.

33
Shell companies are not permitted in Antigua and Barbuda. International companies are
authorized to possess bearer shares; however, the license application requires disclosure of the
names and addresses of directors (who must be natural persons), the activities the corporation
intends to conduct, the names of shareholders, and number of shares they will hold. Registered
agents or service providers are compelled by law to know the names of beneficial owners.
Offshore financial institutions are exempt from corporate income tax.
ONDCP has a four-pronged approach to combatting narcotics trafficking and money laundering
via the reporting of financial intelligence and investigation, AML/CFT compliance, anti-drug
strategy, and counternarcotics operations. The Royal Police Force of Antigua and Barbuda is
also responsible for investigating drug trafficking, money laundering, terrorist financing, and
other financial crimes.
Casinos and internet gaming maintain a strong presence in Antigua and Barbuda. The Financial
Services Regulatory Commission (FSRC) regulates internet gaming companies, and the ONDCP
maintains records of payouts over $25,000 (also reported to the FSRC). Regulations require
internet gaming companies to incorporate as IBCs and the majority of individuals in key
management positions to maintain a physical presence on the island. Additionally, domestic
casinos must incorporate as domestic corporations.
The following entities must comply with CDD rules: banks, international offshore banking
businesses, venture risk capital providers, and money transmission services; entities offering
financial services, foreign exchange, financial and commodities-based derivative instruments, or
transferable or negotiable instruments; money brokers and exchanges, money lenders, and pawn
shops; real property businesses; credit unions, building societies, and trust businesses; dealers in
precious metals, art, jewelry, and high-value goods; casinos and providers of internet gaming and
sports betting; car dealerships; travel agents; company service providers, attorneys, notaries, and
accountants.
Antigua and Barbuda is a member of the CFATF, a FATF-style regional body. Its most recent
mutual evaluation can be found at: https://www.cfatf-
gafic.org/index.php?option=com_docman&task=cat_view&gid=355&Itemid=418&lang=en
AML DEFICIENCIES
Antigua and Barbuda has largely achieved technical compliance with international AML
standards. The government has prosecuted few cases of money laundering and official
corruption, and reports of corruption are endemic.
Antigua and Barbuda continues to work to improve its AML regime. The Proceeds of Crime
Amendment Act of 2014 introduces civil forfeiture provisions in Antigua and includes
amendments to improve the consistency of the provisions relating to criminal confiscation.

34
Antigua and Barbuda recorded its first successful confiscation case under the Proceeds of Crime
Act in October 2015. The ONDCP first arrested two persons with over 160 kilograms of cocaine
aboard a sailing vessel. The Court ordered the defendant to pay the amount of $30,000 to the
government after learning he had forfeitable assets.
ONDCP froze the operations of the European Federal Credit Bank of Antigua (Eurofed), a bank
connected to the former Prime Minister of Ukraine, Pavlo Lazarenko, on the grounds that it had
been obtained through acts of corruption committed during his time in power in Ukraine. In
2016, $66.7 million in frozen assets were transferred to the government’s Forfeiture Fund, which
the government appropriated, not all of which was included on the official budget.
In 2016, U.S. prosecutors alleged that government officials from Antigua and Barbuda
participated in a corruption scandal involving the payout of close to $8 million in bribes by
Brazilian construction contractor Odebrecht. The corruption allegations involve two high-level
officials and two offshore banks in Antigua and Barbuda. Antigua and Barbuda continues to
investigate allegations of money laundering.
Argentina
OVERVIEW
Tax evasion, institutionalized corruption, drug trafficking, and high levels of informal
transactions and contraband trade remain significant challenges for Argentina’s AML regime.
Smuggling across the porous northern border with Bolivia and Paraguay, in the maritime ports,
and especially in the tri-border area (Argentina, Paraguay, and Brazil), is another major source of
illegal proceeds. Since President Macri took office in December 2015, he has taken steps toward
widespread economic reform and to strengthen Argentina’s AML regime.
Argentina has a long history of capital flight and tax evasion, a main predicate crime for money
laundering. Argentines hold billions of U.S. dollars outside the formal financial system, both
domestically and offshore. In 2016, the Macri government established a tax amnesty program to
allow taxpayers to declare previously unreported assets held both offshore and domestically. It
reached tax information exchange agreements with several countries that will enter into force in
2017 to facilitate increased visibility on Argentina’s offshore assets. The United States also
began ongoing negotiations with Argentina on a bilateral tax treaty and concluded negotiations
for a Tax Information Exchange Agreement.
The Financial Information Unit (UIF) and the Central Bank supervise money remittance flows,
which are carried out by approximately 20 financial entities. Independent remittance companies
also act through agents such as banks, post offices, and their own office franchises.

35
TBML remains a significant concern. Economic reforms aimed at increasing trade and
encouraging growth may be exploited by transnational criminal organizations through a wide
range of TBML schemes. Intellectual property rights violations, particularly the sale of
counterfeit goods, also generate significant proceeds that contribute to illicit financial activity.
Argentine Customs is working to staff and train new personnel for its Trade Transparency Unit,
which has suffered from significant personnel turnover in recent years.
Under law 27.260 of June 2016, the Argentine government moved the UIF from the Ministry of
Justice and Human Rights to the Ministry of Economy and Finance (MOEF). This promises to
strengthen the UIF’s autonomy. The law also reinforces the obligation of the UIF to maintain
the secrecy of the identity of its sources of information when disseminating information to
prosecutors and judges and authorizes the UIF, at its own discretion, to communicate
information to other public agencies having intelligence or investigative powers.
On October 14, 2016, the MOEF published Resolution 135/2016, issuing new regulations
governing the UIF’s information exchanges with both its international and inter-ministerial
counterparts. The Argentine government is in the process of creating a criminal intelligence
fusion center of which the UIF will be a member.
Argentina is a member of the FATF and the GAFILAT, a FATF-style regional body. Its most
recent mutual evaluation can be found at:
http://www.gafilat.org/UserFiles//Biblioteca/Evaluaciones/Argentina_3ra_Ronda_2010.pdf
AML DEFICIENCIES
Despite noted improvements, implementation of the AML regime remains a challenge. The UIF
has no access to intelligence or judicial databases to cross-check information or conduct link
analysis, and also lacks human and technical resources to analyze STRs. Federal judges and
prosecutors need additional training on the adequate use and protection of intelligence reports
received from the UIF, especially when information is derived from the UIF’s foreign
counterparts.
Many DNFBPs, including high-value goods dealers, NPOs, real estate agents, and notaries, have
no sectoral regulator. Several legally obligated entities have not registered, and there is no
mechanism for enforcement.
Enforcement remains a primary challenge. Critical components of this effort will be the
establishment of trust among the UIF, other AML stakeholders, and the private sector; fostering
a universal culture of AML compliance; improving the ability to coordinate, investigate, and
prosecute complex financial crimes efficiently; providing training and increasing awareness of
financial crimes among judges, prosecutors, and investigators; and increasing convictions.

36
Since the Macri government made the UIF central to its strategy to combat drug trafficking and
pursue public corruption cases, the UIF underwent an almost complete overhaul. In September
2016, FinCEN reestablished information sharing with the UIF after a year-long suspension for
unauthorized disclosure of financial intelligence. The UIF has received general training for all
staff and is receiving donor assistance in establishing a risk-based approach.
Program effectiveness, as measured by convictions and asset forfeiture, has been negligible.
From 1999-2015, Argentina successfully prosecuted only one contraband smuggling and seven
money laundering cases. In 2016, the Argentine government successfully prosecuted two cases
of money laundering linked to drug smuggling involving 16 defendants.
Systematic deficiencies in Argentina’s criminal justice system persist, including widespread
delays in the judicial process, a lack of judicial independence, and legal loopholes. Investigative
judges and prosecutors lack experience in financial crimes. As of May 2016, 70 cases of UIF
sanctions were under appeal in the court system. Eight had been decided, all against the UIF,
and there were no cases where UIF application of penalties against a financial institution had
been upheld. Additionally, the UIF is currently obligated to collaborate on all cases referred to it
by a judge, giving it no independent ability to turn down a case or be strategic about which cases
to pursue.
Aruba
OVERVIEW
Aruba is an autonomous country within the Kingdom of the Netherlands. The kingdom retains
responsibility for foreign policy and defense, including signing international conventions. The
kingdom may extend international conventions to the autonomous countries. With the
kingdom’s agreement, each autonomous country can be assigned a status of its own within
international or regional organizations subject to the organization’s agreement. The individual
countries may conclude MOUs in areas in which they have autonomy, as long as these MOUs do
not infringe on the foreign policy of the kingdom as a whole. The Kingdom extended the
application to Aruba of the UN Drug Convention in 1999 and the UNTOC in 2007. A governor
appointed by the King represents the kingdom on the island, and a Minister Plenipotentiary
represents Aruba in the Kingdom Council of Ministers.
In June 2016, Aruba, Sint Maarten, the Netherlands, and Curacao signed an MOU with the
United States to stimulate joint activities and enhance sharing of information in the areas of
criminal investigation and upholding public order and security and to strengthen mutual
cooperation in the areas of forensics and the organization of the criminal justice system. While
the MOU is a broad-based attempt to improve all of the criminal justice system, one priority area
is cracking down on money laundering operations.

37
Aruba is not considered a regional financial center. Because of its location, Aruba is a
transshipment point for drugs from South America bound for the United States and Europe, and
for currency flowing in the opposite direction. Bulk cash smuggling represents a risk due to the
location of Aruba between North and South America. Money laundering is primarily related to
proceeds from illegal narcotics trafficked by criminal organizations and occurs through real
estate purchases and international tax shelters. There is no significant black market for smuggled
goods on Aruba.
The Free Zone Aruba NV (FZA) is a government-owned limited liability company which
manages and develops the free zones. (Service companies also can set up business outside of the
designated customs-controlled free zones.) All companies with free zone status are reviewed and
controlled by the FZA, which also has an integrity system in place to deter illegal activities,
including smuggling and money laundering. Financial services, banks, and insurance companies
are not permitted to operate in the free zones. There are 13 casinos, and online gaming is
allowed under a licensing and reporting system.
KYC laws cover banks, life insurance companies and insurance brokers, money transfer
companies, investment companies and brokers, factoring and leasing companies, trust and
company service providers, car dealers, casinos, lawyers, civil notaries, accountants, tax
advisors, realtors, and dealers in precious metals, stones, and other high-value objects.
The MLAT between the Kingdom of the Netherlands and the United States applies to Aruba and
is regularly used by U.S. and Dutch law enforcement agencies for international drug trafficking
and money laundering investigations.
The 1981 MLAT between the Kingdom of the Netherlands and the United States, rather than the
U.S. - EU Agreement, which has not yet been extended to the Kingdom’s Caribbean countries,
applies to Aruba and is regularly used by U.S. and Aruban law enforcement agencies for
international drug trafficking and money laundering investigations.
Aruba is a member of the CFATF, a FATF-style regional body, and, through the Kingdom, the
FATF. Its most recent mutual evaluation can be found at:
https://www.cfatf-gafic.org/index.php/documents/cfatf-mutual-evaluation-reports/aruba-2
AML DEFICIENCIES
Aruba’s money laundering laws do not cover proceeds generated from counterfeiting and piracy
of products, insider trading, market manipulation, many types of environmental crimes, or fraud.
The Kingdom has not yet extended the application of the UNCAC to Aruba.

38
Aruba does not have a suspicious transaction reporting system but rather a broader unusual
transaction reporting (UTR) system. Service providers are required to report large cash
transactions of $14,000 or more, wire transactions of $279,000 or more, other unusual
transactions, and transactions suspected to be related to money laundering.
Aruba enacted a State Ordinance for the Prevention of and Combating Money Laundering and
Terrorist Financing (AML/CFT State Ordinance) with new rules for the identification and
verification of clients and the reporting of unusual transactions to prevent and combat money
laundering and terrorist financing when providing certain services. Non-regulated financial
service providers (including investment brokers and factoring and leasing companies) and
DNFBPs (including lawyers, civil notaries, tax advisors, accountants, jewelers, high-value goods
dealers, and casinos) must also comply with the requirements of the AML/CFT State Ordinance
and must register with the Central Bank of Aruba (CBA). The CBA continues to implement the
recommendations of the AML/CFT National Risk Assessment conducted in 2012. In 2015,
Aruban authorities supported the seizure of $4.4 million and several arrests in an international
money laundering case.
Azerbaijan
OVERVIEW
Azerbaijan is both a transit point between the East and West, given its geographic location, and a
conduit for illicit funding, given its economic difficulties. The majority of foreign investment
and international trade in Azerbaijan continues to be in the energy sector. While all other
economic activities lag behind the energy sector, Azerbaijan has developed a new strategy for
economic diversification to diminish its overdependence on income from energy resources; the
results of this strategy are pending its implementation. The economic realities of the manat’s
continued devaluation and a financial sector suffering from exponentially growing rates of non-
performing loan, coupled with Azerbaijan’s physical location between Iran and Russia, create an
environment conducive to the transit of illicit funds.
The major source of criminal proceeds in Azerbaijan continues to be public corruption across all
sectors and agencies within the government. In addition, the Afghan drug trade generates
significant illicit funds, some of which transit Azerbaijan. Although the passage of the Joint
Comprehensive Plan of Action has opened Iran for transit of funds, it is unlikely that Azerbaijan
will experience a demonstrable decrease in funds from Iran. Robbery, tax evasion, smuggling,
trafficking, and organized crime continue to generate illicit funds in Azerbaijan as well.
Additional money laundering likely occurs in the financial sector, including in non-bank
financial entities and alternative remittance systems. Azerbaijan also possesses a significant
black market for smuggled goods for sale in-country and is a transit point for smuggled cargo.

39
The Azerbaijani government has taken several steps to thwart the transit of illicit funds.
Azerbaijan is actively working to create an unfavorable environment for illicit funds activity
through a package of legislation entitled “The National Action Plan,” which includes four codes,
seven laws, one ordinance of the Cabinet of Ministers, and one Presidential Decree. The plan is
expected to be submitted to Parliament in February 2017. This legislative package specifically
empowers multiple ministries and agencies (Justice, Finance, Taxes, Internal Affairs, State
Security Service, State Border Service, and State Customs Committee) as well as the Cabinet of
Ministers, Central Bank, Chamber of Auditors, Supreme Court, and Prosecutor General’s Office
to execute this comprehensive legislation. As part of its active and ongoing measures,
Azerbaijan established the Financial Markets Supervision Authority (FMSA) by Presidential
Decree in February 2016. This body was explicitly given the authority to oversee the
development and implementation of reforms and oversee their successful implementation.
Azerbaijan is currently developing MOUs on AML cooperation between the FMSA and the FIUs
of the United Arab Emirates, Ukraine, San Marino, Estonia, Moldova, Turkey, Slovenia, and
Georgia.
Azerbaijan is a member of MONEYVAL, a FATF-style regional body. Its most recent mutual
http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Azerbaijan_en.asp
AML DEFICIENCIES
While the FMSA is taking significant legislative action to address the recognized deficiencies,
until such legislation is approved: criminal liability for money laundering has not been extended
to legal persons in Azerbaijan; criminalization of the acquisition, possession, and use of property
obtained with illicit funds is limited to “significant amounts” only; banks are not legislatively
required to share customers’ CDD information with correspondent banks; sanctions are not
effective, proportionate, or dissuasive to financial institutions; and loopholes exist inhibiting
proper identification of PEPs.
The AML law excludes dealers of arts, antiques, and other high-value consumer goods; entities
dealing with jewelry and precious metals; travel agencies; and auto dealers from the list of
covered entities. These entities are not required to maintain customer information or report
suspicious activity.
With the new legislative package, the FMSA has placed an affirmative obligation on financial
institutions to report AML activities, including designation and placement of the offending party
on the FMSA website as a “designated person.” As a result of this designation, the FMSA,
through the relevant government ministries, will be able to freeze the assets of the named
individual/entity. Until the legislative package becomes law, the noted deficiencies remain. Its
comprehensive scope makes it difficult to forecast its effectiveness and what unintended
consequences may arise.

40
Bahamas
OVERVIEW
The Commonwealth of the Bahamas is a regional and offshore financial center. The country’s
economy is heavily reliant upon tourism, tourism-driven construction, and the offshore financial
sector. The Bahamas remains a transit point for illegal drugs bound for the United States and
other international markets.
The major sources of laundered proceeds are drug trafficking, firearms trafficking, gaming, and
human smuggling. There is a black market for smuggled cigarettes and guns. Money laundering
trends include the purchase of real estate, large vehicles, boats, and jewelry, as well as the
processing of money through a complex web of legitimate businesses and IBCs registered in the
offshore financial sector. Drug traffickers and other criminal organizations take advantage of the
large number of IBCs and offshore banks registered in the Bahamas to launder money, despite
CDD and transaction reporting requirements.
According to a 2013 report by the IMF, the Bahamas is a “major offshore financial center.” The
offshore sector consists mostly of branches or subsidiaries of global financial institutions. The
IMF report notes that, while oversight of the financial system has improved, the Bahamas is still
recognized as a significant tax haven. For example, the Bahamas does not disclose in a public
registry information about trusts and foundations, maintain official records of company
beneficial ownership, require that company accounts be placed on public record, or require
resident paying agents to tell the domestic tax authorities about payments to non-residents.
Casino gaming is legal for tourists and the Bahamas has four large casinos, including a casino in
Bimini that draws in customers from the United States via a ferry service to and from Miami.
The $3.5 billion Chinese Export-Import Bank-funded Baha Mar Casino and Resort on New
Providence Island did not open as scheduled in 2015 or in 2016. When completed, it will be the
largest casino in the Caribbean.
The country has one large FTZ, Freeport Harbor, managed by a private entity, the Freeport
Harbor Company, a joint venture between Hutchison Port Holdings (a subsidiary of a Hong
Kong company) and The Port Group (The Grand Bahama Port Authority, the Bahamian
parastatal regulatory agency). The Freeport Harbor Company includes the Freeport Container
Port and Grand Bahama International Airport as well as private boat, ferry, and cruise ship
facilities and roll-on/roll-off facilities for containerized cargo and car transshipments.
Current law prohibits Bahamian citizens, permanent residents, and temporary workers from
gambling in casinos. However, gaming operations based on U.S.-based lottery results and
hosted on the internet, locally known as “web shops,” flourish in the Bahamas.

US State Dept report on money laundering and financial crimes

US State Dept report on money laundering and financial crimes

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